Clients: Oceanside firm took thousands of dollars, didn't do work and closed

Owner said he contacted the FBI

People who hired an Oceanside law firm to help them fix their credit score told Team 10 they are out thousands of dollars and now the business is closed.

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SAN DIEGO - Mark Ramirez said he hired the Georggin Law Firm to help repair his credit after he sold his home through a short sale.

"It was my first home. So you know I did work hard for that and unfortunately I lost it and I trusted these individuals to help me out with my credit," said Ramirez.

Rameriz said he was referred to the Georggin Law Firm by his real estate agent who attended a session run by the firm's vice president Eric Phillips.

He said the sales pitch Phillips gave him over the phone sold him on the firm.

"Yeah, and that they would represent you if they did have to go to court," said Ramirez.

Former employee Lindsey Esser explained the program to Team 10. Esser said she worked for the firm for one month and then quit.

"Clients would sell their home through a short sale and the banks would report the missed payments on their credit report. The clients would then take the banks to small claims court for erroneously or inaccurately reporting their short sale leaving the client with open liabilities on their credit report. If the banks were found negligent-they would have to delete the entire account," said Esser.

Ramirez said he paid the firm nearly $3,000 in October of 2011.

"And part of the deal was if you go to court and you lose in court it's a 100 percent back guarantee. There's no questions asked," said Ramirez.

Phillips is on YouTube videos talking about the guarantee.

"Unheard of for a law firm … you will see our refund policy. If I don't get the judgment for your client, I hand them a 100 percent refund on the spot. On right there, on the guarantee is my bar number," he said.

After hiring the firm, Ramirez said his court date came in March of 2013, but no one showed up to help him.

"And no one showed up to help me out. I was on my own. And after making the payments you never heard back from him," said Ramirez.

Team 10 talked to another former client with a similar story and also found similar complaints on Yelp and the Rip-off report. The Better Business Bureau has received 22 complaints about Georggin Law this year.

"Not only do we see consumers telling us that they're not living up to their expectations, but they're not responding to consumers when there is a problem," said Rachel Newman, who is with the San Diego Better Business Bureau.

Team 10 went to the Georggin Law Firm but the doors are shut and Esser and another former employee said it closed in May.

"All day long all it was angry clients because Eric had put in the contract 100 percent guarantee on their refund if they didn't win in small claims court and when people started trying to collect their refunds, they couldn't because there was no money in the account," said Esser.

Esser explained what happened at a staff meeting with the firm's accountant, saying the firm's money went to Phillips' personal expenses. Another former employee told Team 10 the same thing.

Phillips denies doing anything wrong. He said he was using the account as part of his compensation package.

"We had an office meeting with all of the staff and Eric saying all the money that goes into the account is spent on your rent, on your gym membership, on your life insurance, on your wife," said Esser.

Team 10 called Phillips and asked him about these claims.

"No, the money went into our general account and I along with everyone else was paid out of the general account," said Phillips.

Team 10 asked why Phillips' son was listed as the guarantor for the firm's bank account, when the owner of the firm is attorney Ernest Georggin.

"Ernie was having a tax audit at that time. That's why my son did Ernie that favor and opened the bank account," said Phillips.

Meanwhile, Georggin told Team 10 there was never any audit, and he didn't ask for a favor in opening a bank account.

Phillips said he never told anyone he was an attorney though in a YouTube clip, he mentions his bar number.

"No, and I'm not an attorney," said Phillips.

Phillips said the firm had money trouble, but in the end it was a business that went bad.

"There was never any intent to do anything wrong and I feel that Georggin is a victim as well here as the clients," said Phillips.

Georggin also told Team 10 he closed the business and went to the FBI with what happened, and he's working with the state bar. He said this is the first incident in his entire 30-year career

The California State Bar Association does not list any other complaints or actions against him.

Rameriz, Phillips and Esser all confirmed they've been interviewed by the FBI about the Georggin Law Firm.

Copyright 2013 Scripps Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.